3:57 PM
By Jonathan Stempel
NEW YORK | Wed Jan 5, 2011 6:02pm EST
NEW YORK (Reuters) - Barclays Plc won the dismissal of a lawsuit brought by U.S. investors seeking to recover losses from the British bank's alleged failure to disclose and properly account for its real estate exposure.
U.S. District Judge Paul Crotty found on Wednesday an "absence of ample allegations that Barclays did not truly believe" how it valued its subprime and other real estate assets, and offered "substantial risk disclosures" regarding its valuations to investors who bought its securities.
The Manhattan judge also dismissed dozens of additional defendants. Among these were Barclays directors, including current Chief Executive Robert Diamond and his predecessor John Varley, and more than one dozen underwriters such as Bank of America Corp, Citigroup Inc, Goldman Sachs Group Inc, Royal Bank of Canada and UBS AG.
The lawsuit is one of many by investors to accuse major banks of inflating their share prices by hiding or being too slow to report credit deterioration on their balance sheets.
It was brought by investors who said they bought some of the $5.45 billion of American depositary shares that Barclays issued between April 2006 and April 2008.
They said the shares lost 73 percent to 78 percent of their value by the time the lawsuit began in March 2009, and that Barclays should compensate them for losses they suffered.
David Rosenfeld, a lawyer for the investors, did not immediately return requests for comment. Barclays spokesman Brandon Ashcraft said the bank is pleased with the ruling.
The investors accused Barclays of failing to disclose in materials accompanying the ADS offerings its more than 36 billion pounds ($55.8 billion) of credit exposure, including to subprime mortgages and collateralized debt obligations.
They also said Barclays' disclosures remained inadequate until the bank took a 2.8 billion pound ($4.3 billion) writedown on subprime mortgages and other risky debt in August 2008.
In his ruling, Crotty said the plaintiffs failed to show how Barclays violated accounting and regulatory reporting rules or misled them about its risk management practices, and waited too long to bring some of their claims.
Barclays closed Wednesday up 35 cents at $17.45 in New York.
The case is In re: Barclays Bank Plc Securities Litigation, U.S. District Court, Southern District of New York, No. 09-01989.
(1 British pound = US$1.55)
(Reporting by Jonathan Stempel in New York; editing by Andre Grenon, Bernard Orr)
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